Howie Hubler's Role in the 2008 Financial Crisis

Howie Hubler's Role in the 2008 Financial Crisis was a significant one, as he was a top executive at Morgan Stanley's mortgage trading desk.

He made over $100 million in 2006, a staggering amount that would later be seen as a symptom of the crisis.

Hubler's team was responsible for buying and selling mortgage-backed securities, which ultimately led to massive losses when the housing market collapsed.

In 2007, Morgan Stanley's mortgage trading desk lost $9.2 billion, a huge blow to the company's finances.

If this caught your attention, see: Stanley Druckenmiller

Hubler began working in Morgan Stanley's fixed income division as a bond trader sometime in the late 1990s.

He had a reputation as a hothead and a bully who responded to critiques with strong anger.

In 2003, Morgan Stanley created a proprietary credit default swap for the purpose of shorting bad subprime mortgage bonds.

Hubler was co-opted as the group's manager and placed in charge of the team when a group was being formed to short subprime mortgages in 2003.

After early successes shorting subprime mortgage bonds, as well as selling bonds, he was promoted to run the newly created Global Proprietary Credit Group (GPCG) in 2006.

Howie Hubler was a key player in the Global Proprietary Credit Group at Morgan Stanley, which offered credit default swaps with premiums paid until any bonds were in default.

This Group operated on low-profit margins due to the costs of keeping trades in place.

Howie Hubler's traders sold $16 billion worth of CDSs on AAA collateralized debt obligations while buying $2 billion in risky mortgage CDSs.

The Group was shorting the subprime mortgage market, but unknowingly took the bad side of the same bet with others.

The AAA collateralized debt obligations (CDOs) the Group relied on actually contained riskier mortgages than they had realized.

This created a massive risk for the Group, as they were betting against the very same market they were selling protection to.

Howie Hubler was a notorious investor who lost his fortune and nearly took Morgan Stanley down with him. He was known as the "subprime villain" for his disastrous bets against risky subprime loans.

Hubler's losses were staggering, totaling $9 billion, and were chronicled in Michael Lewis's book "The Big Short." He also paid $4.65 million for his Rumson estate in 2006, which he's now trying to sell for $4.5 million.

Hubler was a thriving derivatives trader until his excruciating blunder, which happened when he underestimated the economy's decline and had to cover his costs by delving deeper into the CDO business.

Consider reading: Your First Million Arlan Hamilton

By July 2007, the housing market had plummeted, and Morgan Stanley was facing a massive loss.

Hubler's $4 billion sale of swaps to Deutsche Bank had turned into a $1.2 billion loss, and Deutsche Bank's Greg Lippmann was calling Morgan Stanley to collect a whopping $47 million.

Morgan Stanley refused to accept the true value of the CDOs, sending $600 million to Deutsche Bank instead of acknowledging the full loss.

Hubler was stubbornly holding on to his position in the trade, but it was a losing game. He should have folded when he had the chance.

Morgan Stanley's eventual exit from the trade resulted in a net loss of $9 billion, the second-largest trading loss in Wall Street history.

Additional reading: Td Bank Ceo Bharat Masrani Has Announced His Retirement.

Howie Hubler was arguing with the company management about his pay, insisting that his $25 million bonus for 2006 should be larger in 2007.

A risk analysis was performed on the Global Proprietary Credit Group's portfolio, which showed that a 10% default rate would crash it, but Hubler disagreed with this assessment.

Hubler's disputes with the internal review and the other side of the CDO trades cost Morgan Stanley more, causing them to stay in the trades longer.

These disputes led to Morgan Stanley taking nearly the largest possible loss by the end of everything, totaling $9 billion for Hubler's group and $58 billion total from the subprime crisis.

Hubler lost his job over this, but he also left with $10 million in back pay.

Howie Hubler, a notorious subprime investor, is selling his Rumson estate for $4.5 million.

He paid $4.65 million for the home in 2006, near the peak of the housing bubble, which is $150,000 more than the current listing price.

The estate is the eighth most expensive listing in Rumson, according to Zillow.

Taxes on the property are a whopping $65,754 a year, records show.

Hubler's disastrous bets against risky subprime loans cost Morgan Stanley $9 billion.

He was a thriving derivatives trader until his blunder, which was chronicled by Michael Lewis in his book "The Big Short."

Howie Hubler, the notorious "subprime villain", is back in the news after putting his Rumson estate on the market for $4.5 million.

He paid $4.65 million for the home in 2006, near the peak of the housing bubble, which is $150,000 more than the current listing price.

Taxes on the property are a whopping $65,754 a year, records show.

Hubler's disastrous bets against risky subprime loans cost Morgan Stanley $9 billion, making him the trader who lost the most money in Wall Street history.

He was a thriving derivatives trader until his excruciating blunder, which was chronicled by Michael Lewis in his book about the 2008 financial meltdown "The Big Short."

Hubler resigned from Morgan Stanley in 2007, taking tens of millions in back pay with him, according to Lewis.

The former Morgan Stanley bond trader is trying to move on from his past, but the stigma of being a "subprime villain" still follows him.

Broaden your view: John Paulson Trader